VentureStorm Escrow Service

The new way for entrepreneurs to pay developers on VentureStorm!

We just released VentureStorm 3.0, and with it come some huge changes! We switched our payment processor to Braintree, added escrow services, and updated the project process. Now these changes might not sound like they’re relevant to your account, but I can guarantee they’re all relative to both entrepreneurs and developers (and can significantly boost your experience using VentureStorm).

With Braintree we have the freedom to really customize the way payments flow through VentureStorm. Ultimately we can securely tokenize our customer’s credit cards and save them for later use. This will give us the freedom to create payment flows and models that fit within the needs of any project and developer/entrepreneur relationship.

The VentureStorm Escrow service leverages the Braintree processing power to allow us to hold funds for later release. This is perfect for those contractual relationships freelance developers need to manage with clients. VentureStorm Escrow provides the perfect infrastructure for us to be the trusted third party in the relationship and takes care of all 1099-K tax forms contractors need to maintain for the IRS.

Setting up a Developer Submerchant Account

In order to accept payments a developer must set up a Braintree SubMerchant Account under VentureStorm. This account can be created or updated by going to the Submerchant Account under Account Settings on your VentureStorm profile.

It may take a few hours for your submerchant account to become active. If you have any questions or issues please reach out to us via the contact form located on the footer.

Putting Money into Escrow

When an entrepreneur and developer come to an agreement on payments (see below for commitment level management best practices), the next step is to put money in escrow. Adding money is simple. Head to your project page and under Our Team click Options and select Add Escrow Payment (See figure below).

A small pop up will display a form to select which developer the payment is going to how much, and a Braintree hosted credit card form.

NOTE: VentureStorm escrow does not allow you to release split payments (i.e. if you put in $1,000 you are only allowed release the full $1,000). This is key to think about if you want milestone-based payments as we mention below.

Lump Sum Payment

If a project manager is hiring a developer as a contractor for a small project it may make sense to pay a single lump sum for the project upon completion. This is the simplest relationship. A project owner and the new developer must agree upon the payment amount prior to development. Upon agreement the project owner can put the money into the VentureStorm escrow and release it upon project completion.

Escrow for Contractual (1099) Relationships (milestone based payments)

The most obvious use case for escrow payments is when working with a VentureStorm developer on a contractual basis. However many entrepreneurs and developers do not properly agree on milestones and milestone payments ahead of development. This is key to think about as soon as a project owner and a developer meet and begin discussing details about working together.

Each party must set SMART (Specific, Measurable, Agreeable, Realistic, Time-based) milestones to break up the work of the project. Milestones should have associated costs for payments upon completion. This allows the developer to get paid for their work without waiting until the entire project is finished. (NOTE: VentureStorm suggests weighting the finished project much higher than each milestone because half finished code is useless to any project owner)

Once milestone and payments are agreed upon the project owner can put the first milestone payments into VentureStorm Escrow. This signals to the developer that the money is in the bank and being held for completion.

Escrow for Part/Full Time Relationships

If a project owner is looking for a developer that will work a certain number of hours a week while still being a contractor, we recommend utilizing the VentureStorm Escrow service so there is a trusted third party. The only time we do not recommend using VentureStorm Escrow is when you’re finding a developer for an employee employer relationship. This relationship is best managed through your existing pay roll, as they will need W-2 tax forms we do not currently handle.

For those that wish to use the escrow service you can simply place the amount the developer will receive over a two-week period and release the payment at the end of the cycle or when specific milestones are met. The specifics on when payments are released are still up to the agreement between the entrepreneur and developer, but this method has been successful when part/full time developers are treated on paper as contractual when there is a consistent flow of work.